FRMO Corp. (the “Company” or “FRMO”) (OTC Pink: FRMO) today
reported its financial results for the fiscal year 2019, which
ended May 31, 2019.
Financial Highlights
FRMO’s book value as of May 31, 2019 was $174.9 million ($3.98
per share on a fully diluted basis), including $48.6 million of
non-controlling interests. The figure from the prior fiscal
year-end as of May 31, 2018 was $146.9 million ($3.34 per share),
including $27.6 million of non-controlling interests. Current
assets, comprised primarily of cash and equivalents and equity
securities, amounted to $118.3 million as of May 31, 2019, and
$93.2 million as of May 31, 2018. Total liabilities were $16.7
million as of May 31, 2019, compared to $13.5 million as of May 31,
2018, primarily securities sold, not yet purchased and deferred
taxes.
FRMO’s net income attributable to the Company for the fiscal
year ended May 31, 2019 was $4,709,662 ($0.11 per share basic and
diluted) compared to $14,052,518 ($0.32 per share) for the fiscal
year ended May 31, 2018.
For the fiscal year 2019, comprehensive income attributable to
the Company was $4,709,662 compared to $14,835,607 in the prior
year.
FRMO’s net income (loss) attributable to the Company excluding
the effect of unrealized gain (loss) from equity securities net of
taxes for the three months ended May 31, 2019 was $3,398,500 ($0.08
per diluted share) compared to $(4,265,263) ($(0.10) per share) for
the three months ended May 31, 2018. For the year ended May 31,
2019, the amount was $9,027,157 ($0.21 per share) compared to
$14,052,518 ($0.32 per share) for the same period in the prior
year. Net income (loss) attributable to the Company excluding the
effect of unrealized gains (losses) from equity securities net of
taxes is a measure not based on GAAP and is defined and reconciled
to the most directly comparable GAAP measures in “Information
Regarding Non-GAAP Measures” at the end of this release.
As of May 31, 2019 and May 31, 2018, the Company held a 15.49%
and 12.92% equity interest in Horizon Kinetics Hard Assets LLC
(“HKHA”), a company formed by Horizon Kinetics LLC and certain
officers, principal stockholders and directors of FRMO Corp.(“the
Company”). Due to the common control and ownership between HKHA and
the Company’s principal stockholders and directors, HKHA has been
consolidated within the Company’s financial statements. The
noncontrolling interest of 84.51% and 87.08% in HKHA has been
eliminated from results of operations for the periods ended May 31,
2019 and May 31, 2018.
Further details are available in the Company’s Consolidated
Financial Statements for the fiscal year ended May 31, 2019. These
statements have been filed on the OTC Markets Group Disclosure and
News Services, which may be accessed at
www.otcmarkets.com/stock/FRMO/filings. These documents are also
available on the FRMO website at www.frmocorp.com.
Annual Meeting Information
The Chairman, President, and Board of Directors of FRMO Corp.
cordially invite shareholders to attend the Company’s Annual
Meeting of Shareholders at which the Chairman and President will
review the Fiscal 2019 financial results and the outlook for the
future. Board members will be available to answer questions.
Date: Tuesday, September 10, 2019
at 3PM.
Location: The Harvard Club of New
York City 35 West 44th Street New York, NY 10036
Admission to the FRMO Annual Meeting is limited to
stockholders who owned Common Stock as of the close of business on
July 26, 2019, the record date, or their duly appointed proxies,
and one guest. Proof of ownership of FRMO stock and valid
government-issued photo identification must be presented in order
to be admitted to the Annual Meeting. Each guest must also present
valid government-issued photo identification. If your shares are
held in the name of a bank, broker, or other holder of record, you
must bring a brokerage statement or other proof of ownership (or
the equivalent proof of ownership as of the close of business on
the record date of the stockholder who granted you the Proxy). If
your shares are held in certificate form, ownership will be
verified by consulting the list of Registered Shareholders as of
the record date. Registration will begin at 2:00 p.m. No cameras,
recording equipment, electronic devices, large bags, briefcases, or
packages will be permitted in the Annual Meeting. Dress code for
the Harvard Club is business casual (no jeans, sneakers, or
athletic wear permitted).
Condensed Consolidated Balance Sheets (in thousands)
May 31, May 31,
2019
2018
Assets Current Assets: Cash and cash equivalents
$ 53,081
$ 53,617
Equity securities, at fair value
63,565
38,522
Other current assets
1,639
1,095
Total Current Assets
118,285
93,234
Computer equipment, net of accumulated depreciation
95
76
Investment in limited partnerships and other equity investments, at
fair value
47,513
41,407
Investments in securities exchanges
3,641
3,709
Other investments
452
189
Investment in Horizon Kinetics LLC
11,488
11,624
Participation in Horizon Kinetics LLC revenue stream
10,200
10,200
Total Assets
$ 191,674
$ 160,439
Liabilities and Stockholders' Equity Current
Liabilities: Securities sold, not yet purchased
$ 8,133
$ 5,495
Other current liabilities
161
193
Total Current Liabilities
8,294
5,688
Deferred Tax Liability
8,383
7,757
Total Liabilities
16,677
13,445
Stockholders' Equity: Stockholders' Equity Attributable to
the Company
126,384
119,411
Noncontrolling interests
48,613
27,583
Total Stockholders' Equity
174,997
146,994
Total Liabilities and Stockholders' Equity
$ 191,674
$ 160,439
Condensed Consolidated Statements of
Operations (amounts in thousands, except share data)
Three
Months Ended Year Ended May 31, May 31,
May 31, May 31,
2019
2018
2019
2018
(Unaudited) Revenue: Consultancy and advisory fees
$ 522
$ 511
$ 2,027
$ 3,257
Equity earnings from partnerships and limited liability companies
2,360
318
2,560
3,782
Unrealized gains (losses) from investments recorded at fair value
1,283
(6,508)
3,839
8,351
Equity earnings (loss) from investment in The Bermuda Stock
Exchange
(5)
3
181
17
Other
869
643
4,233
1,006
Total revenue before unrealized gains (losses) from equity
securities
5,028
(5,033)
12,840
16,413
Unrealized gains (losses) from equity securities recorded at fair
value
(3,376)
-
6,725
-
Total Revenue
1,652
(5,033)
19,565
16,413
Total Expenses
345
198
1,332
808
Income (Loss) from Operations
1,307
(5,231)
18,233
15,605
Provision for (Benefit from) Income Taxes
661
(1,171)
1,026
1,382
Net Income (Loss)
646
(4,060)
17,207
14,223
Less net income (loss) attributable to noncontrolling interests
(955)
205
12,498
171
Net Income (Loss) Attributable to FRMO Corporation
$ 1,601
$ (4,265)
$ 4,709
$ 14,052
Diluted Net Income (Loss) per Common Share
$ 0.04
$ (0.10)
$ 0.11
$ 0.32
Weighted Average Common Shares Outstanding Basic
43,976,781
43,973,781
43,974,940
43,959,554
Diluted
44,015,088
43,973,781
44,016,535
44,007,828
About FRMO Corp.
FRMO Corp. invests in and receives revenues based upon
consulting and advisory fee interests in the asset management
sector.
FRMO had 43,976,781 shares of common stock outstanding as of May
31, 2019.
For more information, visit our website at www.frmocorp.com.
Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995 – With the exception of historical
information, the matters discussed in this press release are
forward-looking statements that involve a number of risks and
uncertainties. Words like “believe,” “expect” and “anticipate” mean
that these are our best estimates as of this writing, but that
there can be no assurances that expected or anticipated results or
events will actually take place, so our actual future results could
differ significantly from those statements. Factors that could
cause or contribute to such differences include, but are not
limited to: our ability to maintain our competitive advantages, the
general economics of the financial industry, our ability to finance
growth, our ability to identify and close acquisitions on terms
favorable to the Company, and a sustainable market.
Further information on our risk factors is contained in our
quarterly and annual reports as filed on our website
www.frmocorp.com and on www.otcmarkets.com/stock/FRMO/filings.
Information Regarding Non-GAAP
Measures
Net income attributable to the Company excluding the effect of
unrealized gain (loss) from equity securities is net income
attributable to the Company exclusive of unrealized gains or losses
from equity securities, net of tax. Net income attributable to the
Company is the GAAP measure most closely comparable to net income
attributable to the Company excluding the effect of unrealized gain
(loss) from equity securities.
Management uses net income attributable to the Company excluding
the effect of unrealized gain (loss) from equity securities, along
with other measures, to gauge the Company’s performance and
evaluate results, which can be skewed when including unrealized
gains from equity securities, which may vary significantly between
periods. Net income attributable to the Company excluding the
effect of unrealized gain (loss) from equity securities are
provided as supplemental information, and are not a substitute for
net income attributable to the Company and do not reflect the
Company’s overall profitability.
The following table reconciles the net income attributable to
the Company excluding the effect of unrealized gain (loss) from
equity securities to net income attributable to the Company for the
periods indicated:
Three Months Ended
Three Months Ended Year Ended Year
Ended May 31, 2019 May 31, 2018
May 31, 2019 May 31, 2018 (Unaudited)
(Unaudited)
Amount Dilutedearningspercommonshare
Amount Dilutedearningspercommonshare Amount
Dilutedearningspercommonshare Amount
Dilutedearningspercommonshare (000’s except per common share
amounts and percentages)
Net Income Attributable to the Company Excluding the
Effect of Unrealized Gain (Loss) from Equity Securities and Diluted
Earnings per Common Share Reconciliation:
Net income (loss) attributable to the
Company
$
1,601
$
0.04
$
(4,265)
$
(0.10)
$
4,709
$
0.11
$
14,053
$
0.32
Unrealized
gain (loss) from equity securities
(3,376)
-
6,725
-
Unrealized gain (loss) from equity securities attributable
to noncontrolling interests
(1,319)
-
12,135
-
Unrealized gain (loss) from equity securities attributable
to the Company
(2,057)
-
(5,410)
-
Tax benefit on unrealized gain (loss) from equity securities
attributable to the company
260
-
1,092
-
Unrealized (loss) from equity securities attributable to the
Company, net of taxes
(1,797)
$
(0.04)
-
$
0.00
(4,318)
$
(0.10)
-
$
0.00
Net income (loss) attributable to the
Company excluding the effect of unrealized gain (loss) from equity
securities
$
3,398
$
0.08
$
(4,265)
$
(0.10)
$
9,027
$
0.21
$
14,053
$
0.32
Weighted
average diluted shares outstanding
44,015,088
43,973,781
44,016,535
44,007,828
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version on businesswire.com: https://www.businesswire.com/news/home/20190813005792/en/
Thérèse Byars Corporate Secretary Email: tbyars@frmocorp.com
Telephone: 646-495-7337 www.frmocorp.com